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sanzz218
Posts: 17
Registered: ‎11-30-2012
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When do you think is the best time for me to refinance?

Hi all! Just have a question regarding refinancing my auto loan. I just bought a new car in which the first payment was due on September 25, 2012. I needed a new car because my other one was about to kick, I was planning on getting it after winter because I wanted to put a decent down payment but because of the increasing problems with my old car, I was only able to put down 1k. The loan was for $35,995 at an interest rate of 9.14%. This created a car payment of about $650. I easily pay this every month with no struggling but would definitely like to cut down the interest. I am paying a little bit extra than what my monthly payments are and was planning on refinancing in a year. Is it too soon to refinance a year from now? Should I cut down on more of the principle and wait 2 years? Do you guys have any other better suggestions? If I left any information out please let me know. Thanks everyone!

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HoldingOntoHope
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Registered: ‎09-29-2009
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Re: When do you think is the best time for me to refinance?

Whether you can refinance the loan is going to depend on the loan to value (LTV) rate at the time you are looking to finance. Remember that autos depreciate at a rapid rate during the first few years f ownership. And even if you bought it used at a good price if it is late model used the depreciation is still a factor, The best bet is to increase the payments you are making now to reduce the principal loan balance or be prepared to bring some amount of cash to the table at the refi. If you maintain a good payment history on the vehicle and keep any new negative info off your credit report then refinancing in one year SHOULD be an option.

 

For anyone to give you better advice we would at least need to know what type of vehicle you have (including model year and mileage), how long your current loan term is and the total amount you financed out the door to get the vehicle. Also if you put an extreme amount of mileage on your car in a year that is going to affect the value in a negative fashion. 12-15000 miles a year is OK. Much more and you can start to reduce the value from the "Book Value".

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Member
sanzz218
Posts: 17
Registered: ‎11-30-2012
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Re: When do you think is the best time for me to refinance?

[ Edited ]

HoldingOntoHope wrote:

Whether you can refinance the loan is going to depend on the loan to value (LTV) rate at the time you are looking to finance. Remember that autos depreciate at a rapid rate during the first few years f ownership. And even if you bought it used at a good price if it is late model used the depreciation is still a factor, The best bet is to increase the payments you are making now to reduce the principal loan balance or be prepared to bring some amount of cash to the table at the refi. If you maintain a good payment history on the vehicle and keep any new negative info off your credit report then refinancing in one year SHOULD be an option.

 

For anyone to give you better advice we would at least need to know what type of vehicle you have (including model year and mileage), how long your current loan term is and the total amount you financed out the door to get the vehicle. Also if you put an extreme amount of mileage on your car in a year that is going to affect the value in a negative fashion. 12-15000 miles a year is OK. Much more and you can start to reduce the value from the "Book Value".





Thanks for the quick reply. I bought a 2011 Subaru WRS STI and paid $35995 out the door. It is a 72 month loan. I bought it with about 10,000 mileage and I am expecting to put about 12-14,000 on it a year. The one thing good about this car is that is depeciates pretty slowly because it is a high demand car that a lot of people are always looking for. Even when I was looking for one it took me a bit of time with very few of them to pick between. Let me know what you think. Thanks again.

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webhopper
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Registered: ‎09-16-2011
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Re: When do you think is the best time for me to refinance?

I think you should be able to refinance in march with no problem as long as you keep mileage low and throw a lot of money at the principle. I don't like 72 month loans because most of your cash pays only interest for the first year... use a bankrate calculator to determine what a 60 or 48 month payment would be and start paying that amount to bring principle down faster. The easiest way to pay less interest is to reduce your term when you refi and bring cash to the table.

Best of luck!

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Snoopy7
Posts: 47
Registered: ‎03-08-2012
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Re: When do you think is the best time for me to refinance?

Hello,

 

A buddy of mine purchased a car two weeks ago and just refinanced it through his bank to get a 2% rate.  I've seen one other person refinance about a month or so after purchasing from the dealer.  You may want to check with your financial insitution because everyone's situation is different.  YMMV....your mileage may vary, as they say on here.  I'm a big proponent of Credit Unions because you can purchase credit life and disability insurance, therefore, when you're unable to work your payments are made for you. My credit life and disability covers upto $50k.  It's a tiny premium attached to your loan and worth the price in my opinion.

 

Best,

Snoopy7

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ccnewcc
Posts: 560
Registered: ‎09-29-2012
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Re: When do you think is the best time for me to refinance?


sanzz218 wrote:

Hi all! Just have a question regarding refinancing my auto loan. I just bought a new car in which the first payment was due on September 25, 2012. I needed a new car because my other one was about to kick, I was planning on getting it after winter because I wanted to put a decent down payment but because of the increasing problems with my old car, I was only able to put down 1k. The loan was for $35,995 at an interest rate of 9.14%. This created a car payment of about $650. I easily pay this every month with no struggling but would definitely like to cut down the interest. I am paying a little bit extra than what my monthly payments are and was planning on refinancing in a year. Is it too soon to refinance a year from now? Should I cut down on more of the principle and wait 2 years? Do you guys have any other better suggestions? If I left any information out please let me know. Thanks everyone!


Idk, i think that waiting 2 yrs is a bit too long.  I'd think that you could do it in 12 months from the loan date maybe even sooner.  2 yrs just seems too long.

 

But just to give you some perspective:

 

If you only pay $700 a month at that interest rate → you only save 6 months (pay off in 66 months instead of 72)

 

If you pay roughtly $1200 a month at that interest rate → you save 36 months (pay off in 36 months instead of 72)

 

I'd try to refi sooner than 2 yrs.

Member
sanzz218
Posts: 17
Registered: ‎11-30-2012
0

Re: When do you think is the best time for me to refinance?

Okay guys looks like I got a game plan. I will do it in 1 year or sooner and pay down more of the principle each month than just the set monthly payment. Thanks a lot guys!


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